Federal Way appeals 2016 audit

State Department of Retirement Services acknowledges misinformation given to city in final report.

A recent audit by the Washington State Department of Retirement Systems found several problems with how the city of Federal Way was handling employee’s retirement benefits and standby pay for police officers.

However, WSDRS may be responsible for some of the confusion.

Ade Ariwoola, director of finance for the city, said in a recent interview that in a 2002 audit, WSDRS told the city how to properly handle standby pay for on-duty police officers.

After the department completed and reviewed the 2016 audit, it was found that the previous information the city received in 2002 was incorrect. The audit reads in part, “The city was instructed in a prior audit that on-call pay is considered standby pay, and is not reportable compensation.”

The audit continues that the prior audit did not take the nature of the pay into consideration, and instead relied on the name of the pay itself.

Ariwoola said the city has already submitted an appeal regarding that portion of the audit, and expects to hear back by the end of the month.

The appeal reads in part, “The City does not agree with the finding of item 1 of the Management Letter, Lieutenant on-call pay is not standby pay and should be reported.”

WSDRS has acknowledged the misinformation given, so they are hopeful the appeal will go through, Ariwoola said.

The fact still remains that the city incorrectly handled retirement benefits of 14 employees during the 2016 year, according to the audit. Apparently, however, the employees whose retirement services were mishandled were all temporary workers, Ariwoola said.

“We will correct what they ask,” Ariwoola said of the audit findings. “As difficult as it is, we will try to correct what it is. But part of why we are so careful of [temporary workers] is because of some of the complications that come with it.”

Because they are temporary workers, he said, it is more difficult to ascertain if they will continue working in their position through the five-month threshold period when they can start receiving retirement service credit.

Ariwoola stressed that while this situation is still not ideal, no full-time or permanent employees’ retirement credits were affected; only temporary workers.

He said that one thing the city is doing to correct this mistake is looking at both the employees and the positions for retirement service credit, rather than just the position. This would potentially reduce the chance of instances like this happening again in the future.

“Both need to be eligible,” he said.

Ariwoola said they are also speaking to the different directors as well to help better manage the temporary workers and positions in the various departments.

WSDRS was unable to be reached for comment before press time.

The full audit report can be viewed underneath the original audit story here.

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